Five questions to ask yourself

1 Why are you outsourcing?  Companies typically elect to outsource an activity for one of two reasons: they believe it can be performed better by someone else or that it can be performed cheaper by someone else.  In some cases both are true but successful outsourcing requires clarity around its objectives from the outset so be sure of what it is you want to achieve.

2 How important is cost — really?  Be really clear about what you’re willing to compromise to achieve savings, if indeed that is why you have chosen to outsource. There are a number of high profile examples of outsourcing programmes in which the desired level of cost cutting has been achieved but has come hand in hand with a significant drop in incremental sales.

3 Are you looking for a supplier or a partner?  There is a role for both but the two are very different.  Supplier relationships tend to be simpler, focusing around one measure of success which is generally cost, and short term.  Partners are typically involved in longer-term programmes with more complex elements, such as shared risk and reward and success measures, other than cost savings.  It’s worth noting that the supplier relationship tends to require more effort to manage despite their apparent simplicity in the set up stage.

4 How much are you willing to share?  The greater access you can give an outsourcer to details of contact volumes and types, the more confident they’ll be in their abilities to deliver.  Consider the information you have available and what you’d be willing or unwilling to share — if you know you can provide the right information ask your potential partners to consider shared risk and reward which will encourage greater co-operation and team work to reach the desired outcome.

5 How open are you to looking at your challenge a different way?  Potential outsourcers will be capable of suggesting a wide variety of options that could meet your needs — try not to be too prescriptive in your initial review of these options as an innovative and perhaps unexpected approach could be perfect for you.  Also, if cost isn’t your sole motivation be sure to consider value and resist the urge to simply compare price tags.

Philip Michell, consulting director, Vertex; philip.michell@vertex.co.uk